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Fitbit shares slump as it slashes forecasts

Thursday, November 3, 2016 8:22
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(Before It's News)

Shares in wearable tech firm Fitbit Inc (NYSE:FIT) slumped by more than 30% on Thursday after the wearable tech firm slashed its forecasts.

The company – which also reported lower-than-expected quarterly revenues – said softer demand and production issues related to its new Flex 2 wristband were to blame.

Fitbit now expects to generate revenues of between US$2.32bn and US$2.4bn for the year, way below Wall Street expectations of around US$2.6bn.

“We continue to grow and are profitable, however, not at the pace previously expected,” said chief executive James Park.

Fourth quarter sales – typically the most important for retailers and electronics firms because of the holiday season – were also forecast to miss analysts’ predictions, Fitbit said.

The san Francisco-based firm said it now expects to make a per share profit for the October to December quarter of between US$0.14 and US$0.18. The market had expected an EPS of US$0.75.

As for its third quarter figures, Fitbit saw a year-on-year rise of 23% in revenues to US$504mln, but missed the consensus forecast of US$509mln.

Competition in the wearable fitness devices sector has intensified in the last year or two, with the likes of Apple, Samsung and Garmin eating into the once dominant firm’s market share.

Shares were down 30% to US$8.98.

Story by ProactiveInvestors

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